Soundboard Association v. FTC

Did FTC interpretation that federal prohibition on telemarketing robocalls applies to telemarketing calls using soundboard technology comport with the requirements of the Administrative Procedure Act and the First Amendment?

The Issue: Pursuant to a Congressional mandate to protect consumers from abusive telemarketing tactics, FTC regulations prohibit telemarketing calls delivering a prerecorded message (“robocalls”). A 2016 FTC staff opinion letter announced that this prohibition would be enforced against calls using “soundboard” technology, in which a live caller plays prerecorded messages, allowing the caller to juggle calls to multiple consumers at once. A soundboard trade association challenged the opinion on the grounds that it was issued without statutorily required public notice and opportunity to comment, and that the prohibition imposes a content-based restriction on speech in violation of the First Amendment.

Why It Matters: The constant ringing of home telephones – and now increasingly cell phones – with junk messages is a nuisance to all, and a scourge to those who work at home, are retired, work the late shift, or otherwise are particularly vulnerable to having their life functions interrupted by generally useless, too often fraudulent, phone calls. Initiation of those calls by an automatic dialer, with the message delivered by a computer, creates the potential for essentially limitless interruption. FTC staff was surely acting in the public interest when it declared soundboard technology – which allows a single person overseas to handle multiple telemarketing calls simultaneously – is a form of robocalling. The Soundboard Association’s (rather terrifying) claim that the First Amendment prevents any governmental regulation of robocalls other than an absolute ban departs so far from the purposes of the First Amendment as to make a mockery of the Bill of Rights.

Public Good’s Contribution: Public Good filed a brief in the D.C. Circuit, explaining how soundboard technology is actually used to reduce the cost of placing a telemarketing call to almost nothing, allowing for unlimited intrusion into the privacy of the home, while masking the fact that the calls originate overseas. Public Good argued that accepting industry’s First Amendment arguments would undermine government ability to regulate any sort of robocalling, and indeed any commercial speech.

Amicus represented by Public Good: Public Good’s brief in the D.C. Circuit was filed on behalf of itself.

Outcome: A divided panel of the D.C. Circuit dismissed the industry challenge outright on the ground the opinion letter did not represent a final agency decision require public notice and comments. The panel did not reach the free speech issues.